Superintendent's Memo #082-11

SUBJECT: Table 15 from the Superintendent’s Annual Report for Virginia and Title I, Part A Maintenance of Effort Calculation for Fiscal Year 2010

Section 22.1-92, Code of Virginia, requires school divisions to prepare and distribute "notification of the estimated average per pupil cost for public education in the school division for the coming year" as well as "actual per pupil state and local education expenditures for the previous school year." This memorandum provides data related to actual per pupil expenditures for fiscal year 2010 as well as a methodology that school divisions may use to estimate per pupil expenditures for fiscal years 2011 and 2012.

In addition, Section 22.1-90, Code of Virginia, requires that school boards “submit at least once each year to the governing body or bodies appropriating funds to the school board a report of all its expenditures. Such report shall also be made available to the public either on the official school division website, if any, or in hard copy at the central school division office, on a template prescribed by the Board of Education.” The requirement that a report of the school division’s total expenditures be made available to the public was added with the passage of House Bill 2269 by the 2009 General Assembly. More information and a reporting template can be found in Superintendent’s Memo Number 181-09, dated July 10, 2009, to be used in meeting this separate reporting requirement.

Attachment A of this memorandum provides Table 15 (Sources of Financial Support for Expenditures, Total Expenditures for Operations and Total Per Pupil Expenditures for Operations) from the Superintendent’s Annual Report for Virginia for fiscal year 2010. Table 15 shows the total and per pupil expenditures for public school operations by fund source for each school division and statewide. The source for this table is the fiscal year 2010 Annual School Report Financial Section (ASRFIN) data submitted by school divisions. Please note that, for purposes of reporting Table 15, data for the four jointly-operated school divisions are combined and reported under the fiscal agent division.

Attachment B of this memorandum provides instructions for downloading an Excel file that contains Table 15 for fiscal year 2010 and an illustration of how it was calculated, as well as worksheets for estimating total and per pupil expenditures by fund source for fiscal years 2011 and 2012. The Excel file is located on the Department’s Web site and may be downloaded from the following address:

Attachment C of this memorandum provides instructions for completing the Table 15 worksheets for estimating total and per pupil expenditures by fund source for fiscal years 2011 and 2012.

CHANGES FOR FISCAL YEAR 2010 TABLE 15

In order to more accurately determine per pupil amounts for school divisions, the end-of-year average daily membership (ADM) figures have been adjusted beginning with the fiscal year 2010 Table 15. The end-of-year ADM total for divisions will now exclude the following categories of students: pupils under the age of 5, pupils for whom the division receives tuition from another Virginia school division, pupils for whom the state’s share of tuition to a private day or private residential program is funded through Comprehensive Services Act funds, pupils in the Interstate Compact Placement Agreement, contiguous out-of-state pupils without the same attendance privileges for whom the division receives tuition, and pupils from non-contiguous states or other territories outside of the United States for whom the division receives tuition. Expenditures for these students have previously been eliminated from the expenditure base amounts used in Table 15. Removing these students from the end-of-year ADM count for Table 15 will allow a proper alignment of expenditures and student counts to generate more accurate per pupil amounts of expenditures.

In order to account more accurately for expenditures related to regional programs, the Table 15 methodology has been modified beginning with the 2009-2010 report. Under the revised methodology, state payments for Regional Alternative Education programs and Academic Year Governor’s Schools are allocated to school divisions according to their participation in these programs and added back to both state revenues and total expenditures for the participating divisions, rather than adding them to state revenues only. As a result of this technical change, state revenues for regional programs will appear as a pass-through of funds for local divisions, which allows for local expenditures to more accurately reflect their correct level.

Both of these changes apply to the fiscal year 2010 Table 15 and were implemented during the development of the table; therefore, values in the table will not coincide with those displayed in Schedule K of the fiscal year 2010 ASRFIN templates submitted by school divisions. Future ASRFIN data collection templates and tables will include these adjustments.

We hope that you find this information helpful in complying with the reporting requirements of Section 22.1-92, Code of Virginia. The Excel file provided to school divisions as part of this memorandum is for local use only; no data generated from the Excel file should be returned to the Department of Education.

TITLE I, PART A MAINTENANCE OF EFFORT CALCULATION

As a requirement for Title I, Part A funding, all school divisions must meet the maintenance of effort ("MOE") requirement as specified in sections 1120(a) and 9521 of the Elementary and Secondary Education Act (ESEA). Divisions must expend at least 90 percent of the preceding year’s effort from local and state expenditures, including sales tax, either on a total expenditure basis or per pupil expenditure basis.

The Department has completed the Title I, Part A LEA Maintenance of Effort calculation for fiscal year 2010, as compared with fiscal year 2009. This calculation is based on data from the fiscal year 2009 Table 15 and fiscal year 2010 Table 15, excluding Community Services expenditures, as reported by school divisions on the Annual School Report. Attachment D of this memorandum provides an Excel file that details the fiscal year 2010 calculations of Title I, Part A MOE for each school division. The key data in this file are in columns AS and AT of the “Title I, Part A MOE” tab. These columns show the total percent of change and per pupil percent of change between fiscal year 2009 and fiscal year 2010.

Based on these final calculations, certain divisions did not meet MOE requirements between fiscal year 2009 and fiscal year 2010. Pursuant to Title I, Part A guidance from USED revised as of March 2010 and Section 9521 of the Uniform Provisions under the No Child Left Behind Act of 2001 (NCLB), if a division fails to meet maintenance of effort, their Title I, Part A, and other applicable NCLB allocations, will be decreased by the amount the division did not meet the 90 percent maintenance of effort. States and/or divisions may apply for a waiver if they experience an exceptional or uncontrollable circumstance or a precipitous decline in resources. Section C-5 of the guidance states:

"In deciding whether to grant a state a waiver of the maintenance of effort requirement, USED will consider the extent of the exceptional or uncontrollable circumstances cited. For example, if financial problems related to the economic downturn are cited, USED will consider the extent of the decline in available financial resources, in view of the ARRA, as well as changes in demand for services. USED will be concerned if the state reduces the proportion of total revenues spent on education and will take that fact into consideration as well."

Based on the above guidance from USED, the Department applied for a waiver on behalf of school divisions failing to meet Title I, Part A maintenance of effort for fiscal year 2010 on February 4, 2011. At the time of this memorandum, the Department has not received a response to this waiver request from USED. Divisions who failed to meet MOE from fiscal year 2009 to fiscal year 2010 and divisions on the margin of not meeting the 90 percent maintenance of effort requirement should monitor their division’s level of effort required to meet the Title I, Part A maintenance of effort requirement from fiscal year 2010 to fiscal year 2011.

In addition to Attachment D, the Excel calculation template for the 2011 General Assembly’s adopted amendments to the 2010-2012 budget includes a worksheet that may be used to estimate a school division’s compliance with meeting Title I, Part A Maintenance of Effort requirements in fiscal years 2011 and 2012. This Excel file and associated instructions are located on the Department’s Web site and may be downloaded from the following address: